PKN Orlen to buy ExxonMobil's Polish shale gas licences

07 December 2012 12:24[Source: ICIS news]

LONDON (ICIS)--PKN Orlen has agreed to acquire from US energy major ExxonMobil Corp two licences to explore for hydrocarbons, including shale gas, in Central Poland, the Polish oil and petrochemicals group said on Friday.

The licences will be bought at an undisclosed cost provided approval is given to the transaction by Poland's environment ministry, it added.

Covering an area of 2,150 square kilometers near Wodynie-Lukow and Wolomin, the licences will increase Orlen's number of licences to 10, encompassing an area of nearly 9,000 square kilometers, state-controlled Orlen said.

ExxonMobil pulled out of shale gas exploration efforts in Poland in June saying the early wells it had drilled had not shown strong gas flow rates.

In a note to investors, investment bank WOOD & Company said the ongoing exit of foreign operators from Poland's shale gas exploration “is not good news as it signals that either shale gas prospectivity or the economics of potential production may not be as promising as thought earlier”.

“Regarding Orlen's expansion in shale gas licences, we note that Orlen is taking on an unusually large risk by putting all its eggs in one basket when it comes to its exploration & production efforts and risking billions of Polish zloty in one of the riskiest and most expensive explorations.”

In mid-July, Poland said it aimed to develop original technology for shale gas and shale oil extraction within 36 months with a zlotych (Zl) 1bn ($313.5m, €242.1m) research and development programme.